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VZCZCXR09571 
RR RUEHDBU 

DE RUEHNT #1481/01 2260848 
ZNY CCCCC ZZH 
R 140848Z AUG 07 
FM AMEMBASSY TASHKENT 
TO RUEHC/SECSTATE WASHDC 8303 
INFO RUEHAH/AMEMBASSY ASHGABAT 3215 
RUEHTA/AMEMBASSY ASTANA 9371 
RUEHEK/AMEMBASSY BISHKEK 3826 
RUEHDBU /AMEMBASSY DUSHANBE 3688 
RUEATRS/DEPT OF TREASURY WASHDC 

CONFIDENTIAL SECTION 01 OF 02 TASHKENT 001481 

SIPDIS 

SIPDIS 

E.O. 12958: DECL: 08/14/2017 
TAGS: PGOV EFIN PTER KTFN UZ 

SUBJECT: PASSING THE BUCK ON MONEY LAUNDERING 
REF: TASHKENT 1196 

Classified By: CDA Brad Hanson for reasons 1.4 (b) and (d). 



Summary 



^1 . (C) Government of Uzbekistan officials provided little 

information on anti-money laundering efforts during a 
roundtable with international donors on August 7. Donors 
expressed concern at the suspension of Uzbekistan's money 
laundering law, warning that the decision makes Uzbekistan's 
participation in global anti-money laundering efforts more 
problematic. They also noted that designing effective 
assistance programs is difficult because of the lack of 
information about the problem. Government officials in 
attendance played down the effect of suspending the law, 
claiming that anti-money laundering efforts were continuing. 
The Ministry of Foreign Affairs accused donors of being more 
interested in insulting Uzbekistan than in assisting it; 
rather than ask for information they have no right to, donors 
should provide a list of assistance they are willing to 
provide and let Uzbekistan decide what it needs. Money 
laundering is a difficult subject to discuss here. Most 
people suspect that most instances involve senior government 
officials or other members of the Uzbek elite, but few are 
willing to commit (at the very least) career suicide by 
saying so out loud. End summary. 



Donor Q&A 



1[2 . (SBU) The World Bank and the United Nations Office on 
Drugs and Crime (UNODC) co-sponsored a roundtable of 
international donors and Government of Uzbekistan (GOU) 
officials August 7 to discuss anti-money laundering (AML) and 
terrorist finance issues. Government representatives came 
from the Central Bank of Uzbekistan, State Tax Committee, and 
the Ministry of Foreign Affairs. The stated purpose of the 
meeting was for government officials to brief donors on the 
current money laundering situation and trends and to provide 
insight into what type of future assistance would be most 
helpful to the GOU. 

1[3 . (SBU) Donors expressed concern about the suspension of key 
articles of Uzbekistan's money laundering law until 2013 
(reftel). They noted that the suspended articles provide 
needed authorities for the Financial Intelligence Unit (FIU) 
set up in the General Prosecutor's Office to investigate 
financial crimes and required banks and other financial 
institutes to institute systematic client identification 
systems. In particular, the World Bank representative noted 
that the decision will inhibit Uzbekistan's ability to fully 



participate in global AML efforts. Furthermore, it could 
result in the Financial Action Task Force citing Uzbekistan 
as a country not fully implementing money laundering 
requirements and might also threaten Uzbekistan's membership 
in the Egmont Group. UNODC ' s Legal Advisor reminded the GOU 
officials that planned international AML assistance had 
largely been keyed to the suspended legislation. Donors need 
to understand why the decision was made and its implications 
so they can determine if the planned assistance still is 
relevant and can make any necessary adjustments. Poloff and 
the European Bank for Reconstruction and Development both 
noted that it also would be helpful to have more information 
on money laundering trends and government priorities; without 
this information donors are forced to develop assistance 
programs blind. 



GOU: Ask Somebody Else 



1L4 . (SBU) GOU officials at the meeting generally played down 
the effects of the law's suspension, saying that it would not 
harm Uzbekistan's AML efforts. None could say why the law 
had been suspended, but noted that if donors really wanted to 
know they should have invited the General Prosecutor's Office 
and the Ministry of Justice to participate in the meeting. 
(Note: The World Bank Representative clarified several times 
that both of these organizations had been invited to the 
meeting, but had declined the invitation. End note.) 

Central Bank representatives claimed that guidelines 
requiring banks to know their clients and to report 
suspicious transactions to the FIU are still in place. They 
acknowledged that the Central Bank no longer has any obvious 
legal authority to penalize institutions that fail to 

TASHKENT 00001481 002 OF 002 



implement these guidelines, but claimed that the General 
Prosecutor's Office had assured the Central Bank that such 
authority exists within Uzbekistan's criminal and 
administrative codes. The Tax Committee asserted that most 
money laundering schemes amount to nothing more than efforts 
to avoid paying taxes. The GOU has developed a financial 
transactions database which is used along with data mining 
techniques to identify likely tax cheats. The Tax Committee 
representative suggested that if donors really wanted to 
assist Uzbekistan's AML efforts, they would do the most good 
by helping to improve the tax collection and enforcement 
systems . 



MFA: There You Go Again 



1L5 . (SBU) Chief of MFA's UN Division Khamraev intervened at 
the conclusion of the meeting to rail against what he 
perceived to be unjust criticism of the GOU. He accused 
donors of focusing, as usual, on criticizing Uzbekistan for 
things it had supposedly done wrong, such as suspending the 
AML law, instead of giving it credit for the things that it 
had done right. Uzbekistan is fully committed to stamping 
out money laundering, he said, but criticism and talk of 
"black lists" amount to political pressure against the GOU 
and will not be tolerated. Khamraev said that if donors lack 
information, it is their own fault for "insulting" Uzbekistan 
rather than working with the GOU. The GOU alone will decide 
what information it will provide; rather than demand 
information to which they have no right, donors should simply 
provide the GOU with a list of assistance they are willing to 
provide and let the government decide what it wants to accept. 



Comment 



1[6 . (C) If donor representatives were hoping for a substantive 

discussion at the meeting they were disappointed. Many were 



struck (and annoyed) both by the GOU ' s unwillingness to 
provide even a minimal amount of information and its 
insistence on taking offense where none was intended. Even 
minus the pyrotechnics, a substantive discussion of money 
laundering in Uzbekistan is difficult. Most everyone 
suspects that most instances of money laundering here involve 
senior government officials, organized crime figures 
associated with them, or other members of the Uzbek elite 
seeking to feather nests or purchase vacation homes abroad. 
Any mention of this, however, is taboo to the point of being 
lethal, to one's career if not to one's life. 

HANSON